Budget to avoid fee hikes, service cuts

2011 CTA

September 29, 2010

Next year's CTA budget spares riders from the familiar "doomsday'' threats of service cuts and fare increases, but nothing jumps out in the restrained spending forecast to indicate major strides will be made in 2011 toward creating a world-class transit system.

"We've tried to focus on simple yet substantial goals against the backdrop of serious fiscal challenges,'' CTA President Richard Rodriguez said Wednesday, adding that the transit agency anticipates "steep declines'' in public funding.

Once again the CTA, which faces almost $7 billion in unfunded capital needs, will reluctantly use capital funds meant for improvements to help balance the day-to-day 2011 operating budget and avoid reducing services again, according to the proposed budget released Wednesday.

In February, the CTA eliminated 18 percent of bus service and 9 percent of rail service. In addition, about 1,100 employees were laid off.

As a result of the capital-fund diversion, the planned $599.5 million CTA capital improvement plan will be reduced by $113 million, according to transit officials. They said the move, while painful, is justified because the state has pledged $1.3 billion in capital funding to the CTA over the next five years.

But the state, like the CTA, is struggling, and a more stable financial footing depends on the economy improving. So far this year, the state still owes the CTA $93 million in delayed-subsidy payments.

Rodriguez, who presented next year's budget based on the assumption the state will meet its obligations, declined to say whether fare hikes and service cuts would be put back on the table for next year if Springfield fails to provide the $93 million.

Officials are also counting on other money.

The CTA is scheduled to receive $83 million in bond proceeds as part of an agreement brokered by Gov. Pat Quinn for the CTA to hold the line on fares this year and in 2011. But the CTA would be free to raise fares if the state failed to meet its commitments to pay the public subsidies for operations and the capital funds for system improvements, Rodriguez told the Tribune's editorial board.

The 2011 CTA budget totals $1.34 billion, which is 5 percent higher than this year's budget, caused in part by a 3.5 percent wage increase for union bus and rail employees, as well as rising pension and health care costs. Labor costs make up 70 percent of the CTA's budget.